Uncollected money leaves Toledo seeking payment

As Toledo City Council continues to discuss Mayor Mike Bell’s 2011 budget proposal, millions of dollars owed to the city remain uncollected for a variety of reasons, many of which local officials might not be able to control.

Unpaid income taxes, nuisance-abatement fees and water bills are an everyday reality for city department heads and attorneys. But collecting on these past-due payments is more difficult than simply issuing a written reprimand.

A North Toledo resident going by the name “Neighborhood Concerns” notified Toledo Free Press in early December of his belief that city officials had not been diligent in pursuing unpaid fees. “Concerns” filed a Freedom of Information Act request for the billing histories of several Toledo properties that had outstanding nuisance-abatement fees due.

The request was denied because “no responsive documents exist,” meaning the documentation Concerns sought was not available in the form he had requested. Concerns interpreted this to mean city officials had absolutely no documentation of billing these properties, thus making future collection impossible.

Bob Mossing, code enforcement manager for the Toledo Department of Housing, had a different explanation. He said the request was not worded properly and was one of many inquiries this individual had made. Tracking down the answers to all of Concerns’ questions is not required by state law and would distract his attention from more pressing matters, he said.

“We certainly have the records. It’s just a matter of asking for records rather than asking mass amounts of questions,” Mossing said. “That’s the subtle difference in this particular case. I can understand how this person, he or she, would be confused.”

Toledo’s housing department “work(s) with the community to create and maintain clean, safe, attractive neighborhoods,” according to the city’s website. Part of maintaining neighborhoods involves code enforcement and issuing fines when that code is broken. As code enforcement manager, Mossing can fine residents if their houses become dilapidated, often leading to a safety or health risk, or if a property is littered with trash.

When a nuisance property is reported, the Department of Neighborhoods will notify the homeowner that a code violation must be fixed within 30 days. If the problem persists, the department will issue a $75 fine and send a crew to fix the violation. The owner also must pay the city for its services. Repeat violations and unpaid fees lead to steeper fines every 30 days: $150 for a second offense and $300 up to four times after that. If the situation still is unresolved, the city can press criminal charges.

According to data Mossing conveyed via telephone, the Toledo Department of Neighborhoods issued 5,430 fines in 2009. That figure does not include fines for homes that had to be demolished. As of the end of November, Mossing said his department issued about 300 fines a month in 2010.

Collecting payment on those fines is a difficult task, Mossing said. Many residents whose homes fall into disrepair do not have the money to correct the problem or to pay the fine for the code infraction. After 90 days without payment, the case is passed on to the collection agency Sheer, Green, & Burke, L.P.A.

“The collection company, they keep going after them. If they have money in the future then they try to make it whole,” Mossing said.

The agency also can place a collection lien against the property or take the homeowner to court. But unlike most tax cases, nuisance abatement fees can be discharged when filing bankruptcy. If the homeowner truly cannot pay, there is little the city can do, Mossing said, adding the department had collected about $5,200 a month in 2010 through November. That includes what homeowners paid to the city and what the agency collected. Mossing estimated the collection rate at about 25 percent.

The payment the city receives does not go into the general fund but rather a nuisance abatement trust fund, which serves to help elderly homeowners maintain their properties. Mossing said the department spends about $100,000 a year from the fund when money is available, but only $40,000 was present when Mossing talked with Toledo Free Press in early December.

City officials must also deal with collection issues for income taxes and water bills. City law director Adam Loukx said these are much more readily collectable than nuisance-abatement fees.

“By and large, tax is a collectable debt because you can’t discharge it in bankruptcy except in very narrow circumstances,” he said. “With utilities, you have the ability not to provide the service, and that helps us collect.”

Toledo City Council approved an ordinance allowing a 25-percent surcharge to be added to a delinquent taxpayer’s bill. But senior city tax attorney Jim Bishop said that fee often is put aside when debtors cooperate. He said the ultimate goal is reaching an agreement that satisfies both parties.

“Since the first bill they receive, we are always open for payment options that work for their situations,” Bishop said. “Filing a lawsuit is the last thing that we want.”

Bishop said the city sued for $15.8 million in unpaid tax dollars in 2010. His department oversees 4,600 pending cases, some of which are suits against employers who withheld income tax dollars from employees but never paid the city.

The easiest way to make the collection process go smoothly is to cooperate with authorities as soon as possible, Loukx said, noting most cases are resolved soon after the delinquent taxpayer is first notified.

“A lot of times, it’s a matter of people not having the money, so we work with them, but the sooner a settlement comes up, the easier it is,” he said.